The role of financial technology in developing the banking sector in Iraq

Abstract

The global banking sector is undergoing fundamental transformations due to the rapid evolution of financial technology (FinTech), which has become a strategic necessity for enhancing banking performance and promoting financial inclusion. This study aims to examine the status of FinTech adoption in Iraq, focusing on digital infrastructure, core banking systems, regulatory frameworks, and institutional challenges.

The research follows a descriptive–analytical methodology, supported by a field study involving 145 employees from public and private banks as well as e-payment companies. The findings reveal a statistically significant positive relationship between FinTech adoption and the improvement of banking performance. Private banks demonstrated higher levels of digital trust and readiness compared to public banks. Major barriers include weak infrastructure, outdated legal frameworks, and a shortage of specialized digital skills. The study concludes with key recommendations, including the modernization of digital systems, implementation of regulatory sandboxes, and enhancement of consumer financial literacy.